Silicon Valley and Social Value

This is the second piece in a two-part series on less celebrated aspects of Silicon Valley. The first piece, on Silicon Valley’s contribution to income inequality in the United States can be found here.

 

As George Packer ponders in an article in The New Yorker about Silicon Valley and politics, “it suddenly occurred to me that the hottest tech start-ups are solving all the problems of being twenty years old, with cash on hand, because that’s who thinks them up,” with young firms like Airbnb and Uber in mind.

One could put Instagram, acquired last year by Facebook, into the same group. It might seem beside the point to discuss whether these firms actually make the world a better place in addition to simply returning money to shareholders or providing a service or platform for which customers and advertisers will pay. They have no obligation to serve as the harbingers of a better tomorrow, but Valley firms should not pretend that they necessarily perform services that further human kind, as many do.

After all, many Silicon Valley companies lavishly promote the idea that their firm is saving or changing the country or world on a grand scale (the hyperbole of most quixotic startup pitches is evidence enough). According to Packer, however, this may be the exception rather than the norm.

One prominent technologist and intellectual, Jaron Lanier, has argued that technology is doing just the opposite. In fact, Lanier holds the technology industry directly responsible for inequality and the shrinking of the middle class. He observes that information technology and automation have and will continue to destroy middle-class jobs, and eventually even legal research and pharmaceutical and scientific investigation.

He asserts more controversially that information technology has concentrated power in the hands of people who control the largest computers – servers capable of analyzing and employing the large swaths of data about internet-users that companies gather for free.

Aware of our choices, purchases, relationships and movements, companies are becoming able to “predict and manipulate people gradually, over time, shaping tastes and consumption in more effective and insidious ways than even subliminal advertisements do.” Big corporations have been doing this for years.

Lanier’s suggestion is that people should be paid “when information that exists because they exist turns out to be valuable, no matter what kind of information is involved or whether a person intended to provide it or not,” at a price determined by a market.

Lanier’s proposition seems far-fetched as the solution to American economic inequality. It is hard to imagine any company, even the visionary Google, whose advertising revenue depends heavily on its collection of such information, benevolently agreeing to it. In an imaginable future, then, where personal information is the last asset of a middle-class struggling to find stable employment, perhaps Google and Facebook are the malevolent, elite capitalists.

Perhaps only a position at Palantir is as prestigious as one at Google or Facebook among many Stanford students. Their innocent t-shirts abound on our campus – “You had me at ‘Hello, World.’” Yet Palantir conducts analysis of the kind of data and information that many Americans were shocked to learn that their government and its contractors had access to when Edward Snowden leaked classified information to the media several weeks ago.

Has the convenient scapegoat of the financial industry given us an excuse to forget common, reasonable concerns we should have about corporations that crunch Big Data, or from another perspective, the arguably minimal social value of many of the tech firms that grab headlines today?

None of this is to say that Silicon Valley or any particular company or computer technology in general is inherently evil, nor to deny the astounding products, services and ideas that are coming out of Silicon Valley as we speak, or to say that Stanford students should be above making money.

Yet the common arguments that Stanford students should be “above” Wall Street sometimes accompanies the misplaced belief that Silicon Valley is America’s silver bullet and that we as Stanford students are less elitist by association.

And when students casually yet seriously express their openness to government-by-Google (Ggov, if you will) over lunch or a beer, it may be time to step back. The Valley has taken encouraging steps to support immigration and education reform but it surely has the power to do more, perhaps with the influence of forward and outward looking individuals guiding firms from within or pushing against them from without.

Humans have a say in how technological development will actually be put to use – it is not all predetermined. But inequality is increasingly everyone’s problem, and there may be a day when we realize that the magic of the Valley will dissipate as we come to terms with the social value (or lack thereof) of ludicrously financed and universally celebrated technology startups.

About Sunil Rao

  • Jeez

    In your last article you wrote that “[Silicon Valley] has not actively taken money from other parts of society with malicious intent.” In this article you say that “none of this is to say that Silicon Valley or any particular company or computer technology in general is inherently evil.” Would you please just try to make a solid point instead of resorting to these damn weasel words? When you say things like “not actively taken money … with malicious intent” and “[not] inherently evil” still implies that SV has somehow passively taken money malicious intent and that SV might have become evil over time. If you are going to make these assertions then just say them so that people can evaluate your facts and not have to filter for your bias.

  • joao cesar

    Ahhh Lanier, the musician some people love to present as a virtual reality expert… jeez

  • Bruce

    Again, I appreciate the fact that you’re questioning. Just some thoughts:

    -You can look at Google and Facebook ads with two perspectives: 1. Now these tech companies can insidiously manipulate people to buy certain products. 2. Now these tech companies, based on our browsing preferences, can give us better results and help us find what we want faster and more efficiently.

    -This isn’t really the technology’s faults. Advertisement as an industry has always found a way to engineer tastes and find ways to sell. In fact, most businesses rely on this. The masses use advertisements to let them know what is out there and what they can potentially buy. If you don’t want to be “manipulated,” just don’t buy anything! No one is out there to trick you. Unfortunately, business is business and tech companies need to make money as well. However, I’d much prefer Google to make some blue ads that I never look at while providing many free services and doing cutting-edge innovations, than the cutting-edge innovations we see in finance– complex money making schemes that end up imploding. I will note that finance plays an important role in society. If people can go into the industry and focus on providing the best services possible, then it would be more agreeable and beneficial to society. Unfortunately, those aren’t the motivations of the majority of people who go into the industry.

    -Although startups aren’t each going to be world-changing, Silicon Valley has been. What it’s doing now, and what it’s done in the past has been great for America and the world. Companies like APPL, MSFT and the development of things like the semi-conductor have changed the world–regardless of what evils you say their business practices bring about. Tesla, SpaceX, and important biotech firms are all pushing humanity to new levels. Say what you want about Palantir–but I’m sure it has benefited the protection of citizens. SV is a special place and hopefully it continues to thrive.

    -I will say that the current startup craze is a bit too much. Too many people think this is a get rich quick kind of deal when that’s not really the goal. That “Wall-Street” mentality is starting to creep into SV. But hopefully, with it’s basis in science, engineering and pure skill, it’ll continue to thrive and even lead the US in the future.

  • Bill

    Thanks for writing this.

  • Patrick Donohue

    The question posed and assertions raised are not comfortable ones, but need to be open for discussion. Every once in a while we need to come up for air and get our bearings and make adjustments as necessary.

    Rao voices a valid concern about our lives and work vis-à-vis the Greater Good, which seems to be suffering from some Tragedy Of The Commons qualities. There is a problem with structural unemployment. There is a problem of wealth inequality. The middle class is shrinking and the rolls of the poor are rising. Though, if you are currently a one-percenter, then all is well and you have no problem, for the moment.

    We champion change and the advancement of knowledge, but usually without thought to the collateral damage and unintended consequences. The next disruptive technology is the Holy Grail of the Valley. But what or more importantly who, will be left in its wake.

    Take for instance, the current darling of the Valley, Tesla. (I bought in at $26.00 and am long) It is staffed to the rafters with former denizens of Stanford. Its DNA is the stuff of Stanford. Its goals are noble, good and just. But what if they are extraordinarily successful beyond even their wildest visions within a relatively short time. What if they live up to their disruptive dreams.

    In their wake will be the carcasses of all the companies that made parts for the internal combustion engine, the buggy whip factories of today. More important are the people of blue collar persuasion who will be shoved to the street. People who are probably in their 40s with kids and a mortgage and hopes for a better life for those kids. Hopes inadvertently put in jeopardy by our current darling’s wonderful success.

    Do we write them off as mire chum in the waters of change? Do reach into the philosophical headwater of Ayn Rand and not even give them a second thought or do we lift ourselves up to a higher plane and actually consider their future plight and that of their families, before it is too late for them?

    This is a conundrum worthy of Stanford, the Mother of Disruptive Technology. It is the type of challenge the people of the “Farm” have embraced before and hopefully will again. For the technologies that are spawned here will turn things upside down and from the shake out will come real people, with real families. Consequently, we need to think deeply about this and what could come of just “Ayn Randing” them.

    Look around you. How many of you have Blue Collar roots? Will you forsake this and walk away or will you rise to the challenge and do something? This is the question.

    Look around you, change is everywhere, it is palpable. The Valley is exploding with ideas and “Sand Hill” again feels safe to respond in kind. Good times are here again. But will these newly minted titans of invention be able to see beyond their own visions. Will they remember from whence they came? Will they take their humanity with them into their gilded futures? Will they care?

    The rate of change is geometric in its progression. The current student body of todays Stanford will witness change beyond imagination. They will live lives that will challenge Sci-Fi writers imaginations. They most likely will live lives from the middle of the cyclone. But what will become of the vast majority of people who will end up as road kill on the edge of change?

    Will we make accommodations for them? Will we even care to?

    For eventually the serfs will rise up. We just have to look to history, which has a tendency to repeat itself, due to human nature. We see, in societies where there was no middle class, just the few at the top and all the rest at the bottom, an inherent social instability that reaches critical mass then seems to explode, given the right conditions.

    This happens no matter how draconian the state. The people at the bottom rise up and overthrow the elite. This is usually very messy (see the French Revolution). We don’t want to go there.

    So Stanford, what are you gong to do?

  • Pragmatic Liberal

    We should stop all innovation until we abolish poverty? The aristocracy back then were detested because they inherited their nobility and usually just worked to exploit the poor with higher taxes.
    I think technological advancement is not an exploiter nor is it made up with a bunch of entitled people. These are people who have worked hard to hone new skills, create better products, and strive to change the world.

    We cannot hinder progress to pursue fantasies of equality–it’s not realistic considering the different nations still competing on earth and it would certainly make for a boring humanity and existence.

    What will Stanford do? Sustain its leadership in technological innovation. It’s what attracts many smart people to Stanford instead of East Coast schools, and it’s what gives its student an intellectual edge post-college.

    If you want to work hard to manipulate money for yourself, then go into finance.

    If you really care about those who are losing jobs and don’t have the skill-set to work, then you can sacrifice your life to help them, if that is what you wish.
    Inventing cool stuff is infinitely more powerful and fulfilling than investing your whole life into helping those who often do not help themselves.

    If kids in the slum of India can learn how to program, people here in the US can as well.

    Criticizing the motivations of those who are trying to improve the boundaries of humanity as being negligent is unrealistic. That’s like criticizing the US for not allocating more resources toward African kids who are starving and whatnot–practicality trumps idealistic sentiment that is based on faulty utopian theory.

  • Patrick Donohue

    PRAGMATIC or REALPOLITIK?

    Doth protest too much, methinks.

    “We should stop all innovation until we abolish poverty?” That would certainly be foolish, would it not?

    “These are people who have worked hard to hone new skills, create better products, and strive to change the world.” This is noble, and such people have helped raise the vast majority of humanity from the subsistence existence of the average daily life of the Dark Ages via the Gutenberg Press and other inventions through the Enlightenment and Industrial Revolution to the dazzling land of plenty that half the world lives in today. And for this, we are grateful. But for the unintended byproducts of invention, such as the gyre of plastic marine debris in the central North Pacific Ocean, rivers the catch fire and ozone holes, we are not grateful.

    Now, we come to automation, which in and of itself is good and wonderful. But, there is a flip-side or dystopian perspective regarding overly rapid automation that may cause massive unexpected unemployment resulting in a large population with obsolete skill sets, given most have no habit of continuous education. If this should come to be, it will be necessary for society to gear up all its various institutions which could help deal with the possible displacement that relentlessly increasing automation and other technologies would bring. This undoubtedly will require vision and leadership for it to resolve well.

    Who would have thought that automation would affect lawyers, yet it has, helping to create the highest level of unemployment within the legal profession ever, over 50% for new grads. Which prompts the question of, who is immune?

    A failure to prepare society for the future, may find us living in a third world type economy. For a vital and vibrant middle class is essential to a healthy prosperous economy. They are the market for most of the “stuff of commerce” directly or indirectly. They are the customers on the other end that need to buy the “better products” you create, yes? If there is no middle class, then there is a severe limit to how much “better product” can be absorbed. For the upper middle class will eventually succumb and follow the middle wherever it goes, leaving just the upper crust.

    So what would a pragmatic person do, given this thought?

    Furthermore, if we do go down the dystopian road I don’t see a massive underclass wallowing gleefully in their plight. Nor do I see tolerance for an overbearing, draconian state security apparatus that would be necessary to keep them in check. So what could possibly happen in that situation, given human nature rarely changes?

    Personally, I lean toward Franklin’s pragmatic idiom, “An ounce of prevention is worth a pound of cure,” and the Chinese proverb, “give a man a fish, feed him for a day, teach a man to fish, feed him for a life time.” Thus continuous quality education is called for and should be available to every person regardless of their current station in life. Additionally, the current public education system is undoubtedly broken, failing to prepare kids to thrive in a world of constant change. Also, Public educational systems at all levels, K-12, the state colleges and universities, have all had Money striped out of them. Furtheremore, the junior colleges are bursting at the seams, unable to meet demand.

    Yes, much of it can be online, but this has its limitations, as there are more senses than two and many things that just need to be experienced first hand, as we see with “the d.School” at Stanford.

    “We cannot hinder progress to pursue fantasies of equality” Who proposes this? What “fantasies of equality” are you speaking of?

    “Inventing cool stuff is infinitely more powerful and fulfilling… ” Like you say, to each his own. What excites one, the other finds dull and this is good. For, as you said, “… it would certainly make for a boring humanity and existence [if we were all the same].”

    “… investing your whole life into helping those who often do not help themselves.” Now, this view is interesting, because the word “often” reveals a level of bias unfounded in fact, as you hypothesize, in an implied way, that a majority of the poor deliberately do not help themselves.

    Further, you seem to look down on upon and deride those, who find that helping others to raise themselves up, is, intellectually and creatively, challenging and rewarding. Why should someone pursuing their passion of helping others be less worthy than one who is “Inventing cool stuff”?

    “Criticizing the motivations of those who are trying to improve the boundaries of humanity as being negligent is unrealistic.” I am not sure what this means. I don’t think I was criticizing their motivations as being negligent. For the question was, “… will the newly minted titans of invention be able to see beyond their own visions? Will they take their humanity with them into their gilded futures? Will they care?” I don’t know the answer, do you?

    The point I am trying to make is about “the collateral damage and unintended consequences” that comes on the heels of rapid change. (Please note: unintended) Because the rate of technological change, and in turn social change, is coming to us at a geometrically progressing pace. Currently, we are just past rounding the curve at the bottom of the hockey stick. Thus, from here on out, it will be much more apparent. Still, we, as a society, run the risk of becoming the “slow boiled frog” as we are totally unprepared for the eventualities of this unprecedentedly rapid fundamental change which has never before been experienced outside of war.

    Our institutions and culture are not geared for continuous unrelenting change. This is not to say stop change or slow it down, but serves as a call to those with the best view of the horizon to let the rest know about the fast approaching icebergs just off the starboard bow.

    Further, who in society has the greatest experience dealing with rapid change except for those who live in the middle of it and create it?

    Lastly, there is this interesting tidbit, “That’s like criticizing the US for not allocating more resources toward African kids who are starving…” really, your sense of Noblesse Oblige is stunning. If you were educated at Stanford, I would say they failed you miserably.

    Here is a thought, US $1000.00, is enough to support the average African adult for one year quite well. According to Credit Suisse, the total current wealth of the entire planet combined would be enough to give $45,000.00 to every man, woman and child alive today on the Earth. Further, the majority of that money is controlled by people who reside in the USA. Therefore, I believe you are saying the aforementioned criticism is valid, yes?

    Stanford is more than Technology and Business, as its depth and breadth and quality of instruction has made it the envy of all other institutions of Higher Learning. Yes, people come from all over the world, the crème de la crème, yearning for intellectual wealth, seeking an educational experience that will stretch them in unimaginable ways.

    Hopefully they will also learn something about the implied and explicit obligations and responsibilities that come with a Stanford Education and how that is expected to manifest itself in the world. Which should happen, if Stanford lives up to its ideals and makes it so.